Googles Market Marketing & Strategy in the UK - Essay Example

11 January 2007 Google's market marketing & strategy in the UK Strategy Concept: Resource-Based View Theinternet is the subject of rapid and relentless change. The search engines are constantly trying to increase their coverage of the web; and to improve their functionality. Google is ranked as the most popular search engine among business information users in the Business Information Resources Survey 2006 (Google UK 2007). It is also regarded as being one of the biggest search engines. For this reason, Google UK requires efficient marketing strategy to compete on the market and sustain its strong brand image. Marketing professionals therefore need to work extremely hard to keep up to date with developments in order to ensure that they are up to speed. The concept of resource-based management is founded on the belief that competitive advantage is obtained if a firm can obtain and develop resources which enable it to learn faster and apply its learning more effectively than its rivals. Resource-based view was developed by Barney (1991) who states that firms' competitive advantage deepens upon resources and assets owned by the company. Following Barney (1991) resources are extended if they are: "Valuable (when they enable a firm to conceive or implement strategies that improve its efficiency or effectiveness) Rare (valuable firm resources possessed by large numbers of competing firms cannot be sources of either a competitive advantage or a sustainable competitive advantage) Imperfectly Imitable (because of {a combination of} three reasons: unique historical conditions, causally ambiguous, social complex). Non-Substitutable (there must not be strategically equivalent valuable resources that are themselves either not rare or imitable)" (Resource-Based View 2000). The case of Google UK shows that the company uses resource-based strategy which helps it to develop strategic capability (Fill 12). Similar to its parent company, valuable resources of Google UK allow the company to meet high demands of customers and deliver exceptional quality to end consumers. Google in particular seems to have already undertaken a number of major initiatives such as the indexing of PDF documents, or the purchase of the Deja newsgroup archive. But the reality is that individual search engines do not cover the whole of the visible web, let alone the invisible web. So the prospect of there being a single search engine which has complete coverage of the entire web is some way off. Another variable is dynamic databases (Google: case study 2006). These databases allow users to go directly onto that site in order to perform the search. These databases cover a wide range of different file formats such as free text databases, company directories, market research reports, numeric data or bibliographic information. Even the free text databases vary considerably in their formats. They may each contain a different set of fields or segments. Because the database formats vary so much, and also because of the fact that there are so many different databases, it is not possible to undertake a global search across the entire contents of all the databases available through Google. There are a number of file groups set up which allow cross file searching across a limited number of files, but a key factor in performing a successful and effective search on (Google: case study, 2006). Rare resources of Google are human resources and technological solutions. Also, Google propose customers unique services such as geographic monitoring and Google Video. Service quality is closely connected with Human Resource Management, technology and settings. So, the main "focus" is on service quality and skills of employees which ensure customers satisfaction. Managers must deal with new people issues because the changes brought about by technology definitely require a new kind of employee. The use of technology requires more problem solving skills and the ability to interpret data and is thus likely to lead to a widening gulf between skilled and unskilled workers. Routine tasks requiring a low level of skill are disappearing fast (Google: case study 2006). Imperfectly Imitable resources are created by "unique historical conditions, causally ambiguous, social complex". It is possible to say that these resources have a great impact on the brand name and market position of Google. Google was the first mover in the industry developed by Larry Page and Sergey Brin in 1996. It is possible to assume that a strong barand name helps the company to obtain a 53.6% market share (Google UK 2007). Non-Substitutable resources are not strategically equivalent valuable resource. Thus, these resources allow Google to break down organizational barriers that block the sharing of data across functions. Design, sales, and manufacturing departments must work together. The use of appropriate technology in properly planned systems can have dramatic effects on operations. Organizations are becoming flatter and leaner because top management are able to monitor operations more directly and computers are now taking many decisions previously taken by middle management (Google: case study, 2006). Google relies chiefly on an efficient market system and product improvement. Marketing communication plays a crucial role in successful market performance as it influences brand image and product recognition. For Google, effective marketing communication depends upon effective marketing system and ability to evaluate target market and economic conditions. Technological factors/resources Innovation in production technologies and computerized system of supply chain is the main opportunity for Google marketing communication. The threat is that investment in new technologies requires additional finance. Intellectual property and licensing protect business operations (Google: case study, 2006). The main drivers of virtual market include competitive and strong position on the market. View allows Google to achieve competitive advantage in relations to rivals in a given industry (Yahoo!, Ask.com, Windows Live Search). It is important to note that rare resources reflect quality requirements of customers, their needs and expectations. A primary concern of the company like Google is to seek to innovate through service development, and to strive to enhance competitive performance. In this case, it is only by placing the customer at the centre of service that success can be achieved. Competitive advantage is achieved by Google when the demand sets the quality standard and gives firms a better picture of buyer needs at an earlier time than is available to their rivals. This advantage is enhanced when buyers pressure the firms to innovate quickly and frequently (Fill 34). In general, Google has competitive advantages being one of the biggest companies within the industry. In organizations, noticeably in service industries, the personnel function can also be closely associated with a task function. Human resources have a great impact on profitability and position of Google on the market. For example, many members of the workforce are in direct contact with the customer and are seen as being involved in achieving the objectives of the organization. People are part of the 'product' for which the customer is paying. Customer satisfaction is likely to be affected as much by the courtesy, helpfulness and personal qualities of the staff as by the standard of food and beverage, accommodation or other facilities. This places particular importance on the personnel function. Marketing Concepts: Segmentation Google UK (and its parent company) uses market segmentation in such spheres as advertising, applications and search engine services. A major strength of Google market segmentation is that it can generate specialization. Market segmentation refers to marketing efforts to group potential buyers by demographic characteristics, geographical region, lifestyle, usage patterns, and behavioral factors. Thus, submarkets are frequently established on the basis of income, age, sex, occupation, and complex behavioral dimensions" (Michman 47). At the same time, segmentation involves costs, risks, and possible weaknesses in some cases, especially where accessibility is not easy. In international marketing a common way of defining and describing markets is in terms of export countries. Google market segmentation is based on behavior and psychographics characteristics. Google focuses on whether or not people buy and use its services, as well as how often, and how much they consume. Also, marketing communication is based on psychographics characteristics which group people in terms of their attitudes, values, and lifestyles (Fill, 65). Google uses the following variables to segment the market. Each of the factors plays a role in determining the nature and development of marketing communication. But the relative importance of each depends upon the product/service category Google is dealing with. The main values are a sense of belonging, fun and enjoyment, warm relationships, self-fulfillment, being well-respected, excitement, a sense of accomplishment, security, and self-respect. Specific application areas for this schema, as well as others, include environmental scanning, product introduction and positioning, and advertising. For instance, in advertising and desktop applications, the market is divided between individual and business customers, small and large companies, national and international companies. There is no great impact of age and gender differences. Still, the core of users consists of young professionals and students (Google UK 2007). Following Michman (1991): "The heart of modern marketing strategy is composed of segmenting, targeting, and positioning. The determination of a target market is the first step in developing a marketing strategy" (48). Google proposes a great number of services for diverse customer targets. Virtual companies like Google, are becoming more and more interlinked on a world-wide basis. Advertising and search engine industry that deals in large transactions for companies are becoming increasingly globalized. Google follows differentiated strategy oriented on diverse customer groups with different offerings. Product and price differentiation allows Google to attract diverse customers proposing unique services and products. For instance, customer can select a price from $1,000 or less to $5,000 per advertisement or more according to their income and family size. Google engages in differentiated target marketing, offering a full range of services within a given product category. Clearly there are advantages in following this approach based on the business efficiency. Those products which lend themselves to a standardized approach are those for which there is a sufficiently large global market segment and cultural differences do not impose the need for adaptation (Google UK, 2007; Google: case study 2006). To an extent, then, the greater potential for raised profitability resulting from more efficiency in business functions is undermined by the additional costs required to market the brand on a broad scale. In Google, the price of the product conveys much more to the consumer than simply the amount of money required to make the transaction. Price plays a powerful role in product positioning as it indicates to customers the 'value' of the product, that is, both the actual and perceived value. Google relies on behavioristic segmentation which "divides buyers on the basis of need satisfying benefits to be derived from product use" (Michman 50). These benefits are low price and exceptional services, high quality and customer support. Improved technologies like mobile phones and Internet banking makes it possible to take market segmentation to another level, by providing an economical means by which Google can deliver individualized products and services to each and every customer based on feedback and interaction with the customers. Relationship marketing strategies embrace this idea of treating each customer in an individualized way. Behavior segmentation is focused on whether or not people buy and use a product, as well as how often and how much they use or consume. Specification in Google is determined as a result of an organization's policy, which in turn resulted from decisions on its market policy, which in turn resulted from its consideration of the market or customer needs, requirements, and the activities of competitors. If customers cannot afford premium services, where the prices are too high for them, they can choose quality services at low price. Target market is divided into two broad categories: foreign and domestic customers. Psychographics segmentation includes values and attitudes of potential passengers. The main attitudes are truly high standards of services and excellent support services at comparatively low price. "Benefit segments are based on reasons consumers buy. Cause and effect relationships are emphasized. Relationships between motivations and purchasing patterns in specific situations are presented" (Michman 51). For such services as advertising and applications, segmentation is based on such criteria as a sense of belonging, fun and enjoyment, self-fulfillment and unique personal image. Google's services are segmented using income and life style variables. For instance, rural consumers and buyers from isolated regions and territories will be the main target market for new applications. When targeting specific market segments the marketer should develop those product attributes that generate the benefits matching the requirements of a targeted segment. The main benefits for Google with new services like video or geographic monitoring services are that its target market is large with high buying potential. Regional isolation becomes the main benefit for Google to sell its products and attract millions of buyers around the world. It is not difficult to reach this target market and persuade buyers to use this product (Fill 27) Following (Michman 1991): "When marketers try to target a specific group, such as heavy users, to purchase its product, a distinctive product may need to be developed, special prices established, and special promotion and distribution activities formulated. Frequently, these special activities can help to build customer loyalty" (54). Many target markets of Google are geographically diverse with established buying patterns and low buying potential. Google use brand image and to attract potential customers. Publicity is the main tool which helps to inform potential audience about recent changes and future trends. Google appeals to potential consumers with value proposition and unique image (Google UK 2007). In sum, resources based approach and behavior and benefit segmentation help Google to obtain a strong market position in UK. Behavior segmentation principles are used for new services and products which attract diverse target audiences. It consumers can be categorized according to brand loyalty. These activities reflect the ability to get along with other people, and are important attributes at all levels of interaction. The degree of technical competence required varies according to the type of information provided. Works Cited 1. Google: case study. 2006. 2. Google UK. 2007. 3. Fill, C. Marketing Communication: Contexts, Contents, and Strategies 2 edn. Upper Saddle River, NJ: Prentice Hall, 1999. 4. Michman, R.D. Lifestyle Market Segmentation. Praeger Publishers, 1991. 5. Resource-Based View 2000. Read More